This project uses a design science research (DSR) approach to develop a model of product innovativeness for large packaged (i.e. enterprise systems) software. The project was motivated by the lack of a suitable model to assess the level of innovativeness of business intelligence (BI) software products. The design of the model was informed by a literature-based innovation output indicator (LBIOI) content analysis of 17 years of press releases and publicly available financial records to understand the sources, categories and rate of innovation of typical large BI platform vendor, and a concept-centric literature review of academic research on product and customer innovativeness. The model of product innovativeness for large packaged software (LPS) consists of seven constructs and six associations grouped into an industry perspective and a customer perspective. The industry perspective of the model can be used as stand-alone model to determine the inherent level of innovativeness of a new version of LPS, while the customer perspective can be used in conjunction with the industry perspective to assess the level of innovativeness of a new version of LPS relative to the specific circumstances of the customer. The primary contribution made by this research is the detailed definition of a draft model of product innovativeness for LPS that will be useful for academic researchers and practitioners alike, and the extension of the concept of product innovativeness into IS research. The secondary contribution made by this research is a demonstration that the LBIOI method can be used to describe and understand the nature of innovation for a single software company over an extended period.

1. Information Technology
Development of a Model of Product
Innovativeness for Large Packaged
Software: A Design Science Approach
MBIS(Hons) Minor Thesis
Final Presentation
Mr Steve Remington
Decision Support Systems Laboratory
Supervisor: Emeritus Prof David Arnott

2. Agenda
 Key Definitions
 Research Method and Strategy
 Design Science Phases
– Problem and Relevance
– Industry Case Study
– Literature Review
– Draft Model Design
– Evaluation Method Selection and Design
– Reflection
Minor Thesis Final Presentation - Steve Remington November, 2012 2

3. Key Definitions
 Business Intelligence (BI) Platform
– A system that can “…enable all types of users – from
IT staff to consultants to business users – to build
applications that help organisations learn about and
understand their business” (Gartner, Inc. 2012c)
 Large Packaged Software (LPS)
– “A packaged configuration of software components or
a software-based service, with auxiliary
materials, which is released for and traded in a specific
market, and that requires a significant amount of
customisation and implementation work to be done
before it can meet the requirements of the customer.”
Xu & Brinkkemper 2007)
Minor Thesis Final Presentation - Steve Remington November, 2012 3

4. Key Definitions
 Innovation
– “An innovation is the implementation of a new or
significantly improved product (good or service), or
process, a new marketing method, or a new
organizational method in business
practices, workplace organization or external
relations.” (OECD / Eurostat 2005)
 Innovativeness
– “…a measure of the degree of „newness‟ of an
innovation” (Garcia and Calantone 2002)
Minor Thesis Final Presentation - Steve Remington November, 2012 4

5. Design Science: Guidelines
Identify and define the problem.
Awareness Determine academic and
practical relevance
Investigate the problem in more
detail. Create a tentative design
Suggestion
Approach based on for an artefact and develop
evaluation criteria
design science
research guidelines Development
Design an artefact that realises
the tentative design
developed by
Vaishnavi and
Assess how well the artefact
Kuechler (2007) Evaluation performs with respect to the
evaluation criteria.
Assess the rigour with which the
Reflection research was conducted and the
overall quality of the artefact
Minor Thesis Final Presentation - Steve Remington November, 2012 5

6. Design Science: Strategy for this Project
Practitioner concerns Practitioner and
about reduced academic relevance of
innovativeness in BI Awareness the problem, and scope
software post-2007 of research
Study of innovation in a Understanding of
BI software vendor problem, tentative
Suggestion design and evaluation
Literature review of
product innovativeness criteria
Knowledge of software The Artefact:
vendor innovation and Model of product
general models of Development innovativeness for large
product innovativeness packaged software
Concerns about Design of focus group to
innovativeness in BI evaluate the model of
software post-2007 Evaluation software product
acquisitions innovativeness
Hevner et al. guidelines
to evaluate design Reflection
science research
Minor Thesis Final Presentation - Steve Remington November, 2012 6

7. Awareness
Practitioner concerns Practitioner and
about reduced academic relevance of
innovativeness in BI Awareness the problem, and scope
software post-2007 of research
Study of innovation in a Understanding of
BI software vendor problem, tentative
Suggestion design and evaluation
Literature review of
product innovativeness criteria
Knowledge of software The Artefact:
vendor innovation and Model of product
general models of Development innovativeness for large
product innovativeness packaged software
Concerns about Design of focus group to
innovativeness in BI evaluate the model of
software post-2007 Evaluation software product
acquisitions innovativeness
Hevner et al. guidelines
to evaluate design Reflection
science research
Minor Thesis Final Presentation - Steve Remington November, 2012 7

8. Significance of the BI software market
 The dominant Global BI Platform Market
9,000
technology for DSS in
8,000
medium and large
Annual Worldwide Revenue (US$M)
7,000
organisations 6,000
 A very high technology 5,000
priority of CIOs for five 4,000
of the last seven years 3,000
 Significant money is 2,000
1,000
spent on this software
0
(US$7.8B in 2011) 2006 2007 2008 2009 2010 2011
(Gartner, Inc. 2008a; Gartner, Inc. 2008b; Gartner, Inc. 2009a; Gartner, Inc. 2009b; Gartner, Inc. 2010a; Gartner, Inc. 2010b; Gartner, Inc. 2011a;
Gartner, Inc. 2011b; Gartner, Inc. 2012a ; Gartner, Inc. 2012b)
Minor Thesis Final Presentation - Steve Remington November, 2012 8

9. 2007: The Year of Consolidation
13.7%
10.6% 9.4%
14.5%
18.2% 7.9% 1.2%
(Gartner, Inc. 2008a; IBM Corp. 2007; Oracle Corporation. 2007; SAP AG. 2007)
Minor Thesis Final Presentation - Steve Remington November, 2012 9

10. 2007: The Year of Consolidation
13.7%
10.6% 10.6%
14.5%
26.3%
(Gartner, Inc. 2008a; IBM Corp. 2007; Oracle Corporation. 2007; SAP AG. 2007)
Minor Thesis Final Presentation - Steve Remington November, 2012 10

11. The Problem
“A perceived difference between what is and what should be.”
(Kroenke, Unknown cited in Venable 2006 p. 185)
What is… What should be…
 No suitable model of  A model of product
product innovativeness to innovativeness for LPS
assess BI platform software suitable for academics and
from different vendors practitioners (the artefact)
Relevance of the Model
 Academic
– Researchers use it to study the affect of innovativeness of LPS.
 Practitioner
– Organisations can use it as part of product evaluation processes.
Minor Thesis Final Presentation - Steve Remington November, 2012 11

12. Suggestion: The Industry Perspective
Practitioner concerns Practitioner and
about reduced academic relevance of
innovativeness in BI Awareness the problem, and scope
software post-2007 of research
Study of innovation in a Understanding of
BI software vendor problem, tentative
Suggestion design and evaluation
Literature review of
product innovativeness criteria
Knowledge of software The Artefact:
vendor innovation and Model of product
general models of Development innovativeness for large
product innovativeness packaged software
Concerns about Design of focus group to
innovativeness in BI evaluate the model of
software post-2007 Evaluation software product
acquisitions innovativeness
Hevner et al. guidelines
to evaluate design Reflection
science research
Minor Thesis Final Presentation - Steve Remington November, 2012 12

13. Case Study
 Organisation
– Cognos Inc. (acquired by IBM in 2007)
 Method
– Literature-Based Innovation Output Indicator (LBIOI)
(Edwards and Gordon 1984)
– A form of content analysis used in innovation research
 Data Source
– 17 years of press releases and financial statements
 Classification scheme emerged from content
 Compared pre-acquisition and post-acquisition
innovation behaviour to see if there was change
Minor Thesis Final Presentation - Steve Remington November, 2012 13

14. The LBIOI Process
1. 2. 3.
Identify reporting Select reporting Select time
sources service period
6. 4.
5.
Collect additional Design
Collect data and
data classification and
store in database
(if necessary) database
7. 8. (Edwards and Gordon 1984)
Analyse data Report findings
Minor Thesis Final Presentation - Steve Remington November, 2012 14

15. Classification Scheme
Press Release Product and
Type Technology (P)
Product and
Technology Product
Technology Acquisition (TA) Output (PO)
Type
Product and
Technology Technology Product Product Product
Technology Purchase (TP) Licensing (TL) Release (PR) Application (PA) Integration (PI)
Sub-Type
New New New
Product (NEW) Product (NEW) Product (NEW)
Product
Major Major Major
Output Version (MAJ) Version (MAJ) Version (MAJ)
Version
Minor Minor Minor
Version (MIN) Version (MIN) Version (MIN)
Minor Thesis Final Presentation - Steve Remington November, 2012 15

16. Findings and Conclusions
 1,376 press releases analysed
 197 product and technology press releases found
 230 discrete innovation events identified
 Innovation output is highly variable over time
 Identified a shift from “product” to “marketing”
innovation
 Weak evidence to support reduction in innovation
output post acquisition
– Results may be confounded by change to press
release process caused by acquisition by IBM
Minor Thesis Final Presentation - Steve Remington November, 2012 16

17. Findings and Conclusions
40 100%
Cognos, Inc. ← → IBM Corp.
% of Prouduct Output Announcements in Each Innovation Type
30 75%
No of Product Output Announcements
20 50%
10 25%
- 0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Financial Year
Product Innovation Marketing Innovation Product Output Announcements
Minor Thesis Final Presentation - Steve Remington November, 2012 17

18. Suggestion – The Academic Perspective
Practitioner concerns Practitioner and
about reduced academic relevance of
innovativeness in BI Awareness the problem, and scope
software post-2007 of research
Study of innovation in a Understanding of
BI software vendor problem, tentative
Suggestion design and evaluation
Literature review of
product innovativeness criteria
Knowledge of software The Artefact:
vendor innovation and Model of product
general models of Development innovativeness for large
product innovativeness packaged software
Concerns about Design of focus group to
innovativeness in BI evaluate the model of
software post-2007 Evaluation software product
acquisitions innovativeness
Hevner et al. guidelines
to evaluate design Reflection
science research
Minor Thesis Final Presentation - Steve Remington November, 2012 18

19. Literature Review: Overview
 Scope
– Academic research on product innovativeness
(primarily) and customer innovativeness
 Sample
– 10 highly cited review / meta analysis articles
– 21 highly cited empirical studies on product
innovativeness from all fields
– 6 highly cited conceptual and empirical studies on
customer innovativeness
 Method
– Watson and Webster‟s (2002) concept-centric
analysis
Minor Thesis Final Presentation - Steve Remington November, 2012 19

20. Literature Review: Findings
 Product Innovativeness research has been
conducted for more than 50 years in many fields
 Inconsistent modelling and operationalization
makes cross-study comparisons difficult
 Four common ancillary constructs identified
– Newness to market
– Newness to firm
– Technological newness
– Product uniqueness / superiority
 Majority of research has been conducted from the
firm‟s perspective and lacks customer focus
Minor Thesis Final Presentation - Steve Remington November, 2012 20

21. Literature Review: Findings
 Recent reviews have suggested need to include
customer innovativeness concepts into product
innovativeness models
 Only 5 empirical studies of related to software
 Customer innovativeness is based on Rogers‟
adoption and diffusion theory (ADT)
 Most relevant aspect of ADT to product
innovativeness is “characteristics of innovation”
 Customer‟s perception of attributes of innovation
can change perceived level of innovativeness
Minor Thesis Final Presentation - Steve Remington November, 2012 21

22. Development
Practitioner concerns Practitioner and
about reduced academic relevance of
innovativeness in BI Awareness the problem, and scope
software post-2007 of research
Study of innovation in a Understanding of
BI software vendor problem, tentative
Suggestion design and evaluation
Literature review of
product innovativeness criteria
Knowledge of software The Artefact:
vendor innovation and Model of product
general models of Development innovativeness for large
product innovativeness packaged software
Concerns about Design of focus group to
innovativeness in BI evaluate the model of
software post-2007 Evaluation software product
acquisitions innovativeness
Hevner et al. guidelines
to evaluate design Reflection
science research
Minor Thesis Final Presentation - Steve Remington November, 2012 22

23. Draft Model: Overview
Customer Perspective
Industry Perspective
Relative
Technology
Advantage
Newness
of Innovation
I1 (+)
C2 (+)
Market I2 C1 Perceived
Product
Position Product
(+) Innovativeness (+)
Newness Innovativeness
C3 (−)
I3 (+)
Product Complexity
Advantage of Innovation
Minor Thesis Final Presentation - Steve Remington November, 2012 23

24. Draft Model: Industry Perspective
Newness of functionality
and technology embodied
in the new version of LPS
Technology
Newness
Newness of market
I1 (+) position or customer base
of the new version of LPS
To be used by researchers
Market I2 and industry analysts to
Product
Position
Newness (+) Innovativeness assess innovativeness of
LPS
The overall, inherent level
I3 (+) of newness of the new
version of LPS
Product
Advantage
The degree of superiority
the new version of LPS
has relative to competitors
Minor Thesis Final Presentation - Steve Remington November, 2012 24

25. Draft Model: Customer Perspective
Degree to which customer
perceives new version of
LPS greater than previous
Relative
Advantage
Level of newness of the of Innovation
new version of LPS
perceived by customer
C2 (+)
To be used in conjunction
with industry perspective C1 Perceived
Product
Product
by customer to assess Innovativeness (+) Innovativeness
innovativeness of LPS
The overall, inherent level C3 (−)
of newness of the new
version of LPS
Complexity
of Innovation
Degree to which customer
perceives new version of
LPS difficult to implement
Minor Thesis Final Presentation - Steve Remington November, 2012 25

26. Evaluation
Practitioner concerns Practitioner and
about reduced academic relevance of
innovativeness in BI Awareness the problem, and scope
software post-2007 of research
Study of innovation in a Understanding of
BI software vendor problem, tentative
Suggestion design and evaluation
Literature review of
product innovativeness criteria
Knowledge of software The Artefact:
vendor innovation and Model of product
general models of Development innovativeness for large
product innovativeness packaged software
Concerns about Design of focus group to
innovativeness in BI evaluate the model of
software post-2007 Evaluation software product
acquisitions innovativeness
Hevner et al. guidelines
to evaluate design Reflection
science research
Minor Thesis Final Presentation - Steve Remington November, 2012 26

27. Practitioner concerns Practitioner and
about reduced academic relevance of
innovativeness in BI Awareness the problem, and scope
software post-2007 of research
Study of innovation in a Understanding of
BI software vendor problem, tentative
Suggestion design and evaluation
Literature review of
product innovativeness criteria
Knowledge of software The Artefact:
vendor innovation and Model of product
Method Selection and Design
general models of Development innovativeness for large
product innovativeness packaged software
Concerns about Design of focus group to
innovativeness in BI evaluate the model of
software post-2007 Evaluation software product
acquisitions innovativeness
Hevner et al. guidelines
to evaluate design Reflection
science research
 Due to limitation of minor thesis only evaluation
method selection and design are addressed
 Used Venable et. al. (2012) selection framework
– Strategy: Ex Ante – Naturalistic
– Method: Exploratory Focus Group
 Purpose
– Obtain feedback on draft model to identify
improvements for future development phase
 Objectives
– Assess usefulness of draft model relative to evaluation
criteria in development phase
Minor Thesis Final Presentation - Steve Remington November, 2012 27

28. Reflection
Practitioner concerns Practitioner and
about reduced academic relevance of
innovativeness in BI Awareness the problem, and scope
software post-2007 of research
Study of innovation in a Understanding of
BI software vendor problem, tentative
Suggestion design and evaluation
Literature review of
product innovativeness criteria
Knowledge of software The Artefact:
vendor innovation and Model of product
general models of Development innovativeness for large
product innovativeness packaged software
Concerns about Design of focus group to
innovativeness in BI evaluate the model of
software post-2007 Evaluation software product
acquisitions innovativeness
Hevner et al. guidelines
to evaluate design Reflection
science research
Minor Thesis Final Presentation - Steve Remington November, 2012 28

29. Hevner et al (2004) Guidelines
Minor Thesis Final Presentation - Steve Remington November, 2012 29

30. Question and Comments
Contact Details: Steve Remington (steve.remington@monash.edu)
This presentation is certified 100% pie chart free.
Minor Thesis Final Presentation - Steve Remington November, 2012 30

31. References
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1982: Report to the US Small Business Administration, Glastonbury, Conneticut: The Futures Group.
Garcia, R. & Calantone, R.J., 2002. A critical look at technological innovation typology and
innovativeness terminology: a literature review. Journal of Product Innovation
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Minor Thesis Final Presentation - Steve Remington November, 2012 31

32. References
Gartner, Inc., 2011a. Gartner Forecasts Global Business Intelligence Market to Grow 9.7 Percent in
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Minor Thesis Final Presentation - Steve Remington November, 2012 32

33. References
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Accelerate Leadership for Business User Applications. HighBeam Research. Online Press Release
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Vaishnavi, V. & Kuechler, W., 2007. Design Science Research Methods and Patterns: Innovating
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(Ed.), Emerging Trends and Challenges in Information Technology Management (pp. 184–187).
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paper/framework-design-science-research-activities/32739/
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Information Systems. Advances in Theory and Practice. 7th International Conference, DESRIST
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Watson, R. & Webster, J., 2002. Analyzing the Past to Prepare for the Future: Writing a Literature
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Minor Thesis Final Presentation - Steve Remington November, 2012 33